It’s tax season! Some people love it, some people hate it, and some people loathe it.That feeling of deep unadulterated loathing is restricted to tax accountants only. No one else gets to hate it more.

Despite your feelings on paying (and filing) taxes, if you made money this past year, you have to file. While you can certainly pay somebody to do your taxes, MOST people can easily file on their own and save money by utilizing online software instead of hiring a professional.

So, to take the guesswork out of which online tax software is right for you, we’ve taken a tremendous amount of time to examine the best online tax preparation companies – all which happen to be members of the IRS’ Free File Alliance – to determine which has the best tax preparation software for your particular tax situation.

Best Online Tax Software Breakdown

FreeTaxUSA

Facts

FreeTaxUSA is available for taxpayers with an Adjusted Gross Income of $57,000 or less, under the age of 65, and living in the United States.

Filers can electronically file federal returns for free and state returns for $9.95.

A deluxe edition of FreeTax USA is available for only $5.95 which makes this one of the best values for online tax software! The deluxe edition includes Audit Assist, priority customer support, and unlimited amended returns.

With Audit Assist, if you are chosen for audit by the IRS, FTU’s tax professionals will assist you in gathering the correct records, writing a response to the IRS, and preparing for the audit.

Priority customer support means that you are moved to the front of the line for answers to your tax questions.

If you accidentally omitted data or made an error, no worries! The deluxe edition includes unlimited amended returns for free.

Benefits

FreeTaxUSA is the cheapest of the four options in terms of electronically filing state returns.

Customer support is available for free 24/7. Even better, all the representatives live and work in the United States!

FTU is easy to navigate with interview style questions and the capability of skipping over entire sections that don’t apply to your personal tax situation.

Drawbacks

FreeTaxUSA does not support part-year or nonresident state returns.

It also does not support the following forms (Note: most of these forms do not apply to taxpayers within the AGI limits): Form 2555 (Foreign Wage Income), Schedule H (Household Employment Tax), Form 4835 (Farm Rental), Form 6252 (Installment Sales), Form 8615 (Tax for Children with Income over $1,900), Form 8801 (Prior Year Minimum Tax Credit), Form 8885 (Health Coverage Tax Credit), Form 8853 (Archer MSAs), and Form 6198 (At-Risk Limitations).

While the deluxe version is the cheapest of the four programs, it does not offer as many features as the other online tax software options below.

Bottom line:FreeTaxUSA is the best online tax preparation software for individuals with simplistic tax returns who want to use a no-muss, no-fuss tax software. It is the best online tax software for the most basic of returns.

TaxACT

TaxACT is available for taxpayers living in the United States OR if you’re a citizen or permanent resident with a foreign address.

Filers can electronically file federal returns for free and state returns for $14.95 each. TaxACT supports part-year and nonresident state returns.

A deluxe edition of TaxACT is available for $9.95 for federal only or $21.95 for federal and state. This edition includes some awesome features including Donation Assistant, Life Events, Joint vs. Separate report, and Audit Assistant.

Donation Assistant tracks your charitable contributions and provides audit-backed values. Great for taxpayers who made a large amount of non-cash donations and don’t want to spend hours researching values.

Life Events determines the tax implications of your life changes – including marriage/divorce, adoption, and purchasing a home – in order to maximize deductions.

Joint vs. Separate analyzes the filing status of married taxpayers to determine if Married Filing Joint or Married Filing Separate would yield a larger benefit.

Benefits

This online tax software offers step-by-step guidance and is a great feature for individuals without any tax experience. It takes you through every item in case your tax knowledge is slim to none.

TaxACT has programs called Quick Convert and Stock Assistant. The former allows you to bridge in information from your prior year return, while the latter assists you in quickly entering stock data.

College student? TaxACT has FAFSA Assistance! Prepare and print a worksheet with all the necessary tax information to fill out your FAFSA.

TaxACT’s deluxe program has the widest selection of features – covering everything from itemized deductions to determining how different scenarios will affect your future tax returns. It also offers TaxTutor Guidance – a program that gives taxpayers expert tax preparation tips and strategies.

TaxACT supports all the forms that FreeTaxUSA doesn’t! Nonresident or part-year state returns? No problem! Foreign wage income or household employment tax? Sounds good!

Drawbacks

While TaxACT has an answer center online available for free, it charges $7.95 for help via phone. This is one time fee and will allow the taxpayer to receive phone assistance for the entire tax year.

TaxACT attempts to upsell early and often. That’s great for people who need the deluxe version, but can get irritating if you just want to input a small amount of tax data and be done.

Bottom line: TaxACT is the best online tax software for people who need step-by-step guidance. It has the best deluxe software for taxpayers with more involved tax implications – including non-cash charitable contributions, stock sales, and the purchasing or selling of a residence.

H&R Block

H&R Block is available for taxpayers with an Adjusted Gross Income of $57,000 or less, under the age of 52, and living in the United States.

Filers can electronically file federal returns for free and state returns for $14.95 (or free, if your state is eligible for free file).

Options are available for taxpayers who do not meet the age or income requirements for Free File. The Basic package is for simple tax solutions and is $19.95 for federal returns and $34.95 for state. The Deluxe package is for investors and homeowners and costs $29.95 for federal and $34.95 for state.

Benefits

The first screen you see when you go to file your return is the “Your Year in Review” screen. It is a page of check boxes of things that may have happened in your life within the past year that have tax implications. Examples include marriage/divorce, birth/death, college, medical bills, military service, and buying/selling your house. This helps H&R Block determine what forms will be applicable to your tax situation.

H&R Block’s Help Center is on the side of the screen while you are filling out your return. Do you have a question about the standard deduction versus itemized deductions? Type in your question and a window pops up giving you the information you need. Better yet, your return isn’t interrupted by a screen change.

If you qualify for H&R Block’s Free File program and you live in Alabama, Arkansas, Georgia, Indiana, Michigan, Missouri, New York, North Carolina, Oklahoma, Oregon, South Carolina, or Virginia, you can electronically file your state return for free. All other state returns are $14.95 each.

Drawbacks

H&R Block Free File does not support certain forms including Form 6252 (Installment Sales), Form 8853 (Archer MSAs), and Form 6198 (At-Risk Limitations). If a form is applicable to you but is not supported, it will give you the option to upgrade to the Basic or Deluxe Edition.

While there is a help center available, you should have some basic tax knowledge to use H&R Block. I suggest using H&R if you understand your taxes and know your way around the different tax forms.

Bottom line: H&R Block is the best tax preparation software for people who have basic tax knowledge and have an idea about the different types of deductions that apply to them. Despite the fact that H&R Block has some of the best tax software for tax savvy individuals, taxes can be a challenge if you don’t know what you’re doing. There, we’d suggest this isn’t the best online software for beginners.

It is also available for those U.S. citizens or permanent residents meeting AGI or EIC requirements with addresses outside of the United States.

Filers can electronically file federal returns for free and state returns for $27.99.

Options are available for taxpayers who do not meet the age or income requirements for Free File. The Basic package is for taxpayers who want additional guidance and is $19.99 for federal returns and $36.99 for state. The Deluxe package is for taxpayers looking to maximize their tax deductions and costs $29.99 for federal and $36.99 for state.

Benefits

TurboTax has a Military Edition that walks the men and women in the armed forces through military-related tax situations – including state of residence, uniform deductions, and PCS. It also offers special pricing for military families. These benefits in particular make TurboTax the best online tax software for military families.

This software asks interview-style questions to walk the taxpayer through the return step-by-step. There is generally one or two questions on the page at a time, which is great for individuals who need guidance or have never filed a return on their own before.

TurboTax does not expect filers to understand tax jargon. It speaks layman for those individuals who have very limited tax knowledge.

Drawbacks

TurboTax is the most expensive option in terms of filing your state return.

The income stipulations are a bit more restrictive, with $31,000 being the maximum Adjusted Gross Income for taxpayers who are not active military or eligible for the Earned Income Credit

TurboTax interrupts your process often to try to upsell the Basic and Deluxe editions.

TurboTax does not support certain common tax forms including: Schedule C (Profit or Loss From Business), Schedule D (Capital Gains and Losses), and Schedule E (Supplemental Income and Loss).

Bottom line: Despite the cost, TurboTax is best tax software for first-time filers. It is simplistic and guides the taxpayer through his or her return with ease. It is also the best tax preparation software for individuals serving in the military.

Well, there you have it! I’ve provided you a a thorough breakdown of the best tax software that’s out there. I hope this overview gave you an idea of which is truly the best online tax preparation software for your particular situation. Happy tax season (for you at least)!

{32 Comments}

I’ve been a FreeTaxUSA user for 5 years and frequently test their results with one of the big boys (Turbo or HR) and they’re spot on each year but are ten times less expensive. So I can keep more of my money!

One correction you may consider is that FTU actually has no requirements for the free federal, it’s free for everyone if you come through the homepage (and not the IRS free file page).

My hands were somewhat forced to use Turbo Tax this year to file a free state return. I found it simplistic to a fault. I did not like that in some instances you are required to repeat an entire series of questions to modify a particular line item. Also, it automatically used accelerated depreciation for particular assets, despite my preferred method. I had to use a work-around to calculate depreciation as desired. I discovered it by reading through FAQ’s, which was time-consuming.

I have used TurboTax for a number of years. I use it for my business and personal taxes. It is simple to use and I enjoy it to ease of use. I have not tried the online version because I need the computer version for business. I wouldn’t try anything else.

I’ve used them all at one point or another, but I’ve been with Turbo Tax for the last few years. I just find their layout the easiest to use & I like how they carry my information over from the prior year.

I’m pretty sure I loathe tax season, even though I am not a tax accountant! I haven’t gotten a refund in years and usually owe. I try to tell myself that is good because it means I made money, but that’s a hard argument to win. Thanks for the info. My taxes are too complicated for my feeble brain, but I’m hoping they will become less so later this year when I sell my business.

In the past we have just paid someone to do our taxes but are considering giving it a try on our own this year. We’re not sure who we will use but it’s always nice to read reviews online , pros and cons etc

I’m a long term TurboTax software copy. I’ve been pretty happy with the results for the past ten years I have been using it. If I had one complaint is that when I used their paid on line version I had a fun time trying to import it the next year when I used the version installed on my computer, there was no graceful way to do it other than manually. BTW, I almost hate to admit it but I love large complex spreadsheets too! The more complex the better!

Yeah…I am one who loathes it. I have my own CPA do it. It is waaaaay too expensive, but he has gotten me out of some binds in the past and knows my history for the past 10 years. Highly recommend it. Thanks for the post!

It IS really expensive to hire a CPA, but sometimes it is worth it for complicated returns. Our clients would be lost without us, we handle everything! But they also have tax returns far more complicated than mine.

I sometimes want to gouge my eyes out too! But I couldn’t do that to my coworkers. Losing someone during tax season is so crippling! An eye-less tax accountant would be a useless tax accountant :). Glad your guy took care of it, Jennifer.

Great breakdown Erin! We’ve used a couple of these in the past and have had, generally, good experiences. We moved to hiring a CPA a two years ago as we run our own business. There were just too many moving pieces for me o be able to confidently take care of myself. He’s been a lifesaver and got us a pretty nice refund last year.

Thanks, John! The free software options are great, but with something as time consuming as running a business I totally get that you would want to go with a professional :). I hope you see another nice refund this year! Or at the very least don’t owe anything.

I use Studiotax.com for the Canadian tax returns that I do. Free for all incomes and I love how in subsequent years you can look at the 2 previous years if they were done with the same software and compare amounts.

Hi, Terrie! Hmmm, I’ve never heard of StudioTax but I’m glad you’ve found the right software for you! It’s great that we have so many options to choose from, just a little confusing if you don’t know where to start. Happy tax season!

Firstly – I love your bio (creating financial spreadsheets, and long walks on the beach) classic.
Secondly – I hate tax time. It always reminds me of how careless the Australian government is when it comes to spending my tax dollars.

Tax time is rough for a lot of people. Our clients pay MEGA BUCKS to the U.S. government and they are never too happy about it. But it’s life and they’ve accepted it. Sometimes I wish the government sent us questionaires and we got to choose where our tax dollars went! I would enjoy paying taxes so much more :).

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